What You Need To Know About The Forever Stamp

By consumerist.comMarch 28, 2007

To ease the blow of postal rates going up two cents, the USPS is introducing a new stamp that will always pay the postal rate, no matter when you use it.

Cost: 41 centsGoes on sale: April 12, 2007New rate effective: May 14, 2007Can be used for international mail?: Yes, but only at a value of 41 cents per stamp. Additional postage required to meet the necessary international postal rate.What does it look like: See picture above.

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Not a bad deal, really… It’s only 2 cents more than a regular stamp, but that doesn’t address the fact that the letter is dying.
Well, except for colleges and universities, they seem to be using snail mail just to spite us.

Still, maybe the classiness of a stamp which is valid forever will add to the prestige of sending a letter to someone. I know that I take special care in reading someone’s letter if they took the time to write me one versus if they simply wrote something up in their Gmail window.

People have been asking for these for years. We don’t use a lot of stamps, and after every rate increase we are left with a dozen or so stamps that are a few pennies short of a being useful. These will be the only stamps that we’ll be buying from now on.

@guroth: No, it’s so that the USPS doesn’t lose money selling 1cts stamps everytime the rate changes and so that most consumers (who don’t use stamps very often) don’t have to deal with getting said 1cts stamps. Now if you are afraid of future increases, you can always stock up, but unless you mail hundreds of letters a month, it’s not worth it.

I am so glad they are doing this. I’ve always thought they should just have a “First Class Letter” postage stamp that never requres a stupid 1 or 2 cent stamp to use when the next rate hike goes into play. I really don’t think that many people will horde Forever Stamps, and even if they do, the USPS has the money for them while not doing any work for it, and can therefore invest the money they receive for them. I think it’s win-win for everyone.

Sooooooo… are they going to sell these stamps forever but always a cost bit higher than the cost of the current common postage? Cause it would seem to me that people would just always buy a “forever stamp” and the usps wins in some twisted plot to milk us for more regardless.

As far as I can tell, the reason behind doing this is so it is easier for them to raise rates in the future. Think about it, every time they raise rates they have to deal with people not using enough postage (still using the old stamps), have to print new stamps an get rid of old stock, engage in massive education campaigns, etc. If they were to raise rates as fast as they’d like to, they’d lose mot of the profits in the process. Now they can raise rates more frequently, and more people just won’t notice until they buy their next pack of stamps. They’ll be able to slip in more (and larger) rate hikes with less complains.

It’s not like it matters too much. Whenever you buy stamps, they have your money. In the space of a little over a year, they’ve hiked the price from 39c to 41c, an increase of 2c, or about 5%. Smart money management says that if they were able to bank that 39c, then they’ve already earned 2c in dividends for it.

On the flip side though, you can’t do that sort of math because they can’t bank the whole 39c. They do have operational costs, and have to stay competitive with wages and service offerings. In the past 5 years, prices have gone up from 37c to 41c, an increase of about 10.8%, which means they’re only recently starting to keep up with the CPI and other measures of inflation.

So long as postage rates don’t go up at the rate of college tuitions, I’m ok with it.

@LittleJoe: I think they’ll be sellin the stamps at current first-class rates. The point really is to make it easier for people sending letters (no more worrying and hunting for that 2c stamp), and easier for the PO to process (no more sending the letter back for insufficient postage). And if you buy a huge bulk of forever stamps now, that’s fine, they’ve got your money now, and can put it to good use and investment now.

Lots of people don’t buy postage directly from the post office – in some places, there are bulk auctions of unused postage, usually at far below face value. (ie a 50c stamp for 5c) I see a lot of people buying them *now* in large amounts, and then reselling them in a year or two (or five, or ten) when the rates go up. It’s a cash grab for now, but it may cause serious problems down the road for the USPS – those doing bulk mailings at a first class rate certainly love the idea.

So when the NEXT rate increase is announced, there will be a run on these stamps just before it takes effect. Wanna bet they will be “out” of them almost everywhere, until somehow, mysteriously, the day or so AFTER the rate takes effect, there will be billions of them available!

@RaslDasl: I’m with ya brother. I just keep using the last stamps’ rate until I use up the roll. Are there people out there who actually buy those $.01-.03 denominations to get their postage up to current rate? I’ve never done that in my life. I basically ignore the rate changes and use whatever stamps I currently have.

I have the 1 cent stamps and I use them after each increase. I don’t really use enough stamps to warrant purchasing this forever stamp. I still have tons of 1 cents stamps from when I lived overseas and HAD to use the mail service. I just buy stamps and when they go up I utilize the 1 cent stamps to make up the difference. I don’t have a problem with the concept. Plenty of businesses do it, they get you to buy into a long term contract to stave off price increases in the future.

What is the long term effect? Only the mass junk mailing companies and the USPS will be the greatest benifactors. The regular family unit won’t benefit at all since we’ll be inundated with even more junk mail that appears as Official Government mail, Official Mortgage mail, Official Factory Warranty Expiration mail, etc, etc. Even more Seniors are going to get dupped by mass mailing scams with even more junk mail.

First Class is dying fast with the advent of instant messaging, e-mail, fax machines, cell phones, even phone answering machines.

Good try USPS, to generate investment capital to offset the continued downfall of First Class mail. Initially, you’ll generate money from even families and Seniors but then the truth will hit everyone hard as our mail boxes fill up with even more junk and scams that you allow or should I say, turn your head and ignore.